Neither of us know what the US regulators would say to a merger of the two largest ex-China vertically integrated RE producers, so it's not really constructive talking absolutes... "There is no chance of the USA saying no to a Lynas takeover if MP". Merger talks usually start between companies to see if there is interest and common ground, then maybe a quiet word to authorities to gauge their opinion (DoD is not the regulator to convince btw). What has been reported is that discussions went on for a while, then stopped after no common ground was met... this could be cover for US regulators having a dim view, who knows?
Anyway, whether it happens or not only changes the concentration of western RE-Ox supply and perhaps pricing power, not the total RE feed situation. Of course the US isn't happy sending MP concentrate to China for processing, which is why MP started building their new RE-Ox separation facility in 2022. In 2024 the US granted $58M to MP Materials to build a magnet plant in Texas to take the separated Re-Ox and complete vertical integration. Plenty of articles explaining all this, including MPMaterials: What A Successful Re-Shoring Strategy Could Look Like (forbes.com)
So what happens when MP stop sending concentrate to China to process? Neither China nor Shenghe want to see a perfectly good, low cast RE-seperation plant closing down, so they need to replace the ~50ktpa MP feed staying over next couple of years? Shenghe go out and do off-take, finance and build contract deal with PEK on the Ngualla deposit in Tanzania, which also produces a bastnaesite mineral RE concentrate just like Moutain Pass. Shenghe. PEK would fill RE-feed lost to MP re-shoring as Shenghe needs feed for a bastnaesite purposed (not monazite) separation plant and doesn't lose any RE production for China...
That said, it will take time to ramp up MP's new RE separation facility to max 20kt REO production (~33,000t of 60% TREO con), while MP is currently ramping up concentrate production to 60kt REO (~100kt of 60% TREO concentrate, equiv to ~1.7Mt of 3.5% TREO HCk con, equiv to ~24Mt HCk ore feed per year)... so MP will continue to sell considerable con to Shenghe in China for years to bankroll their downstream expansions. It will take a trebling of MPs RE Seperation plant, or new separation plant downstream players in the US to fully re-shore all of MP's annual concentrate [production. MP is a monster and why LYC is interested in tying up with them. Between LYC's current 12,000t of NdPr production ramp-up and MP's 10,000t NdPr production the west starts with a handy 22,000t NdPr production looking for western magnet producers to take the off-take...
Add in ILU 5.5t NdPr coming out of Eneabba in a couple of years, Energy Fules in the US (done an takeover of BSE today actually for access to Toliara's 'free bi-product 22kt monazite con") and the west is up to 30,000t NdPr-Ox. Then add in Siera Verde for 1500t NdPr stage 1, say 3000t NdPr each for MEI and VMM world calss ionic clay deposits in Brazil Stage 1 (both much better than almost ramping into production Serra Verde also in Brazil) and the West has imminent 40kt NdPr to find a downstream magnet production home for ... (I think there is currently about 10k t of current magent production and another 10kt NdPr magnet production under development to 2030 ex-China...).
PS... those posters comparing ARRNF with the ASX need to look at the rediculously low liquidity and prices going up and down like a whores draws on a daily basis... no price discovery at all, just illiquid games
ARR Price at posting:
25.5¢ Sentiment: None Disclosure: Not Held
... (I think there is currently about 10k t of current magent production and another 10kt NdPr magnet production under development to 2030 ex-China...).
(20min delay)
